MOTO & NT: Again?

It didn't work the first time

Phil Harvey, Editor-in-Chief

February 12, 2008

2 Min Read
MOTO & NT: Again?

1:00 AM -- After our story on Monday, an alert Light Reader reminded us that a joint venture between Motorola Inc. (NYSE: MOT) and Nortel Networks Ltd. has happened before -- and failed.

On Feb. 10, 1992, Motorola and Nortel announced a joint venture that would change the face of communications (by giving it a zit). Paul G. Stern, chairman and chief executive officer of Northern Telecom [now Nortel], said in a press release: "MOTOROLA-NORTEL Communications will bring together the leaders in the field, enabling it to provide customers throughout the Americas with world-class radio and switching equipment."

On the board of the new joint venture sat John Roth, one of the few people to accomplish that great Canadian-American dream of destroying a company and then getting paid for it.

The joint venture, as it was spun in 1992, was designed to capitalize on Motorola's cellular radio and Northern Telecom's digital switching technologies.

But the JV didn't last long. John Roth told the Financial Times in 1993: "We thought that (Motorola) would have a stronger radio portfolio than it turned out they actually had."

Another bone of contention, the press points out, was that Motorola loved CDMA and Nortel favored TDMA.

The JV soon failed and each company took its marbles and went home.

In Crain's Chicago Business, on August 23, 1993, the great Adam Lashinsky picked apart the failed bit: "One Motorola Nortel executive says the [joint venture's] personnel were like 'eunuchs' because they had no power to make independent decisions."

An executive quoted in the piece stated that "Every sales meeting had to have three parties to it, and every decision involved essentially a new layer."

Sounds like fun, no?

The context is much different now, but I wonder if some of the same problems might crop up. From our reader, who lived through the first JV:

Basically the problem was that every deal required sign-off from both sides. If Nortel got a "deal" it would be reject by Motorola because there was not enough Motorola equipment. Same held true of Motorola got a "deal". Neither side trusted the other to sell each others equipment.

Back then, just like now, both sides were getting their clocks cleaned by Ericsson AB (Nasdaq: ERIC) and DSC Communications (now Alcatel-Lucent (NYSE: ALU)).

So what do you think? Is history going to repeat itself?

— Phil Harvey, News Editor, Light Reading

About the Author(s)

Phil Harvey

Editor-in-Chief, Light Reading

Phil Harvey has been a Light Reading writer and editor for more than 18 years combined. He began his second tour as the site's chief editor in April 2020.

His interest in speed and scale means he often covers optical networking and the foundational technologies powering the modern Internet.

Harvey covered networking, Internet infrastructure and dot-com mania in the late 90s for Silicon Valley magazines like UPSIDE and Red Herring before joining Light Reading (for the first time) in late 2000.

After moving to the Republic of Texas, Harvey spent eight years as a contributing tech writer for D CEO magazine, producing columns about tech advances in everything from supercomputing to cellphone recycling.

Harvey is an avid photographer and camera collector – if you accept that compulsive shopping and "collecting" are the same.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like